UK regulators warn public of pension scammer tactics as victims report losing an average of £91,000 in 2017

Aug 17, 2018
A new campaign to tackle pension scams launched last week in the UK as the latest figures reveal that victims of pension scammers lost an average of £91,000 each in 2017.

The Financial Conduct Authority (FCA) and The Pensions Regulator (TPR) have joined forces to urge the public to be on their guard when receiving unexpected offers about their pension and to check who they are dealing with. The two regulators have launched a new ScamSmart advertising campaign targeting pension holders aged 45-65, the group most at risk of pension scams. This comes as a new poll commissioned by the regulators reveals that almost a third (32%) of pension holders aged 45 to 65 would not know how to check whether they are speaking with a legitimate pensions adviser or provider.

Highly sophisticated scammers lure people into transferring their pensions into fraudulent schemes, stealing an average of £91,000 per victim. Victims of pension scams can lose their life savings, and be left facing retirement with limited income.

The FCA and TPR are calling the public’s attention to the tactics used by pensions scammers. One of the most common tactics is to offer a ‘free pension review’. Research reveals that one in eight 45 to 65-year-olds surveyed (12%) said they would trust an offer of a ‘free pension review’ from someone claiming to be a pension advisor.

Cold calling is currently by far the most common method used to initiate pension fraud. Other scam tactics include: 
 
  • Unexpected contact about your pension via phone, post or email;
  • Promises of guaranteed high returns and downplaying the risks;
  • Offering unusual or overseas investments that aren’t regulated by the FCA e.g. overseas hotels, forestry, green energy schemes;
  • Putting people under pressure to make a quick decision, for example with time-limited offers, and sending a courier round with paperwork to sign; and
  • Claiming to be able to unlock money from an individual’s pension (which is normally only possible from age 55).
It is believed that only a minority of pension scams are ever reported. The FCA and TPR are urging anyone who believes they may have been targeted to come forward.

Dimitrios Tsivrikos, consumer and business psychologist, said: "Scammers are intelligent, ambitious and deceiving. They mimic the sales patter used by salesmen, building trust, a rapport and a relationship to infiltrate our psyches and influence our behaviour. That’s why I want everyone to remember that if it sounds too good to be true, then it probably is. So, put the phone down to unsolicited calls regarding your pension and stop a scammer from stealing your retirement."

The FCA and TPR are urging the public to be ScamSmart with their pension and always check who they’re dealing with. The regulators recommend four simple steps to protect yourself from pension scams:
 
  • Reject unexpected pension offers whether made online, on social media or over the phone;
  • Check who you’re dealing with before changing your pension arrangements;
  • Don’t be rushed or pressured into making any decision about your pension; and
  • Consider getting impartial information and advice.
If you think you’ve been a victim of a pension scam, report it. Visit www.fca.org.uk/scamsmart to find out more.

Source: Financial Conduct Authority.